Speech to the Asialink Chairman's Dinner

Australia's Engagement with Asia

Thank you Carrillo Gantner (Chairman, Asialink) for that introduction.

Your contribution to Australian engagement with Asia has been simply outstanding.

Congratulations on 13 years as Chair as Asialink.

You have been a tireless advocate of cultural, business and education links with Asia and a great ambassador for our country in the region.

Professor Glyn Davis (Vice Chancellor, University of Melbourne),

Other distinguished guests, ladies and gentlemen,

As we close in on the end of the year, and as the Government closes in on ten years in office…

… I thought it would be a good opportunity this evening to reflect a little on where we stand with our engagement with Asia.

But to understand where we stand with Asia, we should first understand where we stand internationally.

Ten years ago we thought of ourselves as a middle power.

Before that, and even recently, some commentators have described Australia as a "little country".

This is a description that I strongly reject.

Immediately after World War II, Australia had a population of 7 million, the same size as Belgium.

I know Belgium a little - I lived there for three years.

Australia was indeed a small country in the 1940s and a fairly marginal player in international affairs.

But we now have a population of 20 million and, incidentally, Belgium has a population of only 10 million.

Australia is the sixth biggest country in the world by land mass.

We have the 13 th economy in the world, depending what measure of GDP you use.

Our economy is bigger than all the countries in Asia except China, Japan and Korea.

We're not a little country - we're a country with significant strengths and resources.

This assessment has an important implication… and it is this…

Not only is it in our interests to build relations with Asia…

… but it is also in Asia's interests to build relations with us.

And we now have a relationship with our Asian neighbours that is serving Australia's interests extremely well.

It is built on strong people to people links.

It secures our major overseas markets.

And we have a place at the table at the major regional economic and security dialogues.

It is also importantly a relationship built on a mutual respect that acknowledges there will be times when we will have differences of opinion on important matters.

Now we have a very different approach to that of Singapore on the question of capital punishment.

And I know that many of you share with me my deepest sympathy for the terrible circumstances that Van Nguyen, his family and friends now face.

At the highest levels, the Australian Government has made clear to Singapore our opposition to his execution.

It is deeply regrettable that our differences with Singapore remain, despite our utmost efforts to save this young man's life.

But threatening trade or economic sanctions won't get us anywhere.

Such action would be counter-productive and won't help Van Nguyen or, god forbid, another Australian facing a similar situation in the future.

Rather, a continuing strong and cooperative relationship with Singapore will give us the best chance of influencing that government in the future.

Developments since 1996

Ladies and gentlemen,

Together, Asia and Australia have come through some testing times in the last decade. But we've come through them well.

In 1997, when our neighbours were in economic crisis and their economies contracted by 10 - 14 per cent, Australia showed its economic resilience.

Our strong economy enabled us to be one of only two countries to contribute to all three IMF rescue packages.

Our aid at that time and since has shown that we are a country that is keen to help and keen to engage.

We have a true commitment to the region that no one can legitimately question.

A more recent example of our goodwill is the Indian Ocean Tsunami.

Not only did the Government contribute to the relief and recovery effort through the aid program.

But ordinary Australians donated more than $300 million.

In 1999, our role in leading the INTERFET mission in East Timor was very controversial.

Commentators at the time argued that Timor could destroy relations with Indonesia for a generation or more.

Plainly, this did not come to pass.

In fact, our willingness to act was respected in the region and showed that we could achieve positive humanitarian outcomes when we set our minds to it.

When we came to Government, some commentators saw our commitment to strengthen the US alliance as a qualification on our engagement with our more immediate region.

In recent years, the same commentators have suggested that the greater role that China is playing in the region, economically and strategically, would mean that we would have to rethink our approach to the US.

But this approach fails to recognise the critical influence of the US in regional and world affairs.

It also fails to recognise that a sophisticated foreign policy can pursue multiple objectives at the same time - always pursuing Australia's overall national interest.

The United States has an important role to play in the region, and we encourage an active US presence.

The US has crucial alliance links with Japan, South Korea, Thailand and the Philippines.

We welcomed the recent re-establishment of its military ties with Indonesia.

Our strong relationship with the United States is an asset that we bring to the region.

It is not a matter of choosing between strong relations with Asia and the United States - the two are mutually reinforcing.

When Donald Rumsfeld and Robert Zoellick were in Adelaide two weeks ago, they appreciated our insights into Asia.

And in January we will be meeting for the first time at Ministerial level in a trilateral security dialogue with the United States and Japan.

So we come to the region with a set of strengths - economic strengths, the strength of our alliance with the United States.

And we come to the region with goodwill.

But we engage with the region on our own terms.

Because we pursue a foreign policy that is based on our own interests.

Just as other countries base their foreign policy on their own interests.

Recent developments

And what we have achieved using this approach to Asia, this policy of advancing Australia's national interests?

Well, I think we have made more progress in the last three years than ever before.

I don't make a party political point here.

And there are some simply fantastic developments in the region that an Australian Government would not attempt to claim much credit for - Indonesia's embrace of democracy is one example.

But the simple point is that we are in an incredibly strong position in our economic and strategic relations with Asia as a result of developments over the last three years.

Australia is seen as a constructive and valuable partner.

Take Malaysia as an example.

It's no secret that we've had a difficult relationship with Malaysia for many years.

But I think now relations are as strong as ever, as good as they were at the time of Menzies, Tunku Abdul Rahman and Tun Razak.

The visit by Abdullah Badawi earlier this year was the first by a Malaysian Prime Minister in more than 20 years.

We have entered negotiations for a free trade agreement with Malaysia and I am optimistic that, with time and constructive negotiations, we will be able to conclude this agreement.

We have already achieved FTAs with Singapore and Thailand.

We're negotiating an FTA to link ASEAN and the Australia/New Zealand CER agreement.

In North Asia we are in the early stages of negotiations with China.

These negotiations will be difficult - there's no doubt about that - and agriculture will be particularly difficult.

But I hope that we will be able to work through the difficulties and conclude an agreement.

We have managed to build a very solid relationship with China, despite our very different political systems.

It's a relationship that is built on mutual respect and we don't hide from the difficult issues.

We have an annual Human Rights Dialogue with China and NGOs are engaged in the process.

We have built a spectacular economic relationship with China. Our exports increased by 30 per cent last year alone.

And not only have we benefited from exporting to China, but Australian consumers have benefited from cheap Chinese imports to Australia.

Although Australians are concerned there will be some job losses as a result of cheap imports, the answer is not to construct barriers.

The answer is to have a flexible Australian economy that generates new jobs.

This is what we have achieved, with unemployment now at 5 per cent.

Of course, we need to be careful about making assumptions about the rise of China.

Although economists predict growth of 8 per cent going forward, there are no guarantees about this.

Personally, I'm optimistic that China can successfully navigate the transition to middle-income country status.

But, like South East Asia, there could be bumps along the way.

And Chinese growth is by no means universal or uniform - there are regional disparities and local boom-busts to be managed.

And we should never forget the ongoing strength of the Australia-Japan relationship.

It is not much written about at present, but remember that Japan has been our largest market for 40 years, accounting for almost 20 per cent of our exports and more than the US and China combined.

And the signs of reform in Japan and gradual reinvigoration of the economy are very positive.

And as Japan gradually loosens the restrictions on its military, we are becoming more engaged at the strategic level.

We are protecting Japanese military engineers in Iraq.

As I mentioned earlier, we now have ministerial level security talks - the Trilateral Security Dialogue - along with the United States.

And we work closely with Japan on counter-terrorism and counter-proliferation issues.

After a major effort, including by the Prime Minister, Japan has agreed to a feasibility study into a free trade agreement.

They are wary about agriculture, but we will try to convince them that an FTA is possible.

We continue to push for an FTA also with Korea.

These FTA developments are exciting.

Although our main effort remains the WTO negotiations, these FTAs in the region nevertheless open up great possibilities.

ASEAN is now negotiating agreements with China, India, Japan and with us through the ASEAN-CER FTA.

It's not such a stretch to imagine a free trade area reaching from Northern China, to the west of India and to Stewart Island in New Zealand.

Security cooperation

At the security level, the region is wrestling with the problem of terrorism and here too Australia is a major player along with the United States.

We have demonstrated that we are able to pursue our own national interest, but also that our interests coincide with the interests of countries in Asia.

Our cooperation with Indonesia has been particularly encouraging.

The relationship between the Australian Federal Police and Indonesian police (POLRI) is now legendary.

The two police forces have worked closely to track down the perpetrators of the two Bali bombings, the Marriot Hotel bombing and the Australian Embassy bombing.

More generally, the political relationship with Indonesia is in excellent shape.

The election of President Yudhoyono has underlined Indonesia's successful transition to democracy - one of Asia's great success stories of the last decade.

His visit to Australia this year was a milestone.

And tragic as these events have been, the reactions in both countries to the Tsunami and bombings have, I think, only brought our two countries closer together.

Regional Architecture

In December we also look forward to the East Asia Summit and I will be attending the Foreign Ministers meeting on the 10th.

Ten years ago the architecture of the region was in its infancy.

The ASEAN Regional Forum was only established in 1994, but has now evolved into the region's premier security forum. Australia is a founding member of ARF.

We are also a founding member of APEC.

Now, some people have lately been questioning the worth of APEC and its future.

With the East Asian Summit in December, they question the ongoing relevance of APEC.

But they fail to understand APEC's unique membership and contribution to regional cooperation.

APEC is 21 economies, not just countries, but Taiwan and Hong Kong.

It includes the United States, Canada, Mexico and Chile.

It also includes Russia.

Since 1989 it has aimed at practical-level cooperation between economies.

Avian Flu is a good example of what APEC can achieve - It's the sort of practical initiative, sharing information and cooperating on regional solutions, for which APEC is well suited.

So where, then, is the East Asian Summit going to take us?

Well, the first point to note is that it is very early days.

This is just the first meeting and nothing is set in stone.

And if there is to be an emergence of an East Asian community, it will not, in my view, be built around one institution or meeting.

An East Asian community will emerge for practical reasons, not for ideological reasons.

APEC, the ASEAN Regional Forum, ASEAN plus three, and the East Asia Summit will all contribute to an open but increasingly integrated region.

An East Asian community won't look like the EU.

The political relationships in the region differ greatly from those in Europe.

You can draw an analogy with Europe after World War II when the two key countries and traditional protagonists France and Germany decided to forge a new relationship and built the structures of what is not the European Union.

In Asia the two traditional rivals have always been China and Japan.

And like France and Germany, since the end of World War II these two have managed their rivalry peacefully.

But one cannot imagine an Asian Union built around China and Japan.

Their political structures, national aspirations and levels of development are too different.

The analogy with Europe is relevant in another respect.

Unlike the United Kingdom and Europe, Australia has been part of these emerging structures from the start.

The UK refused to join the European project in its early days, and as a result was unable to have any influence on the way that Europe evolved.

The UK joined in 1973 when the structures were largely formed.

In contrast, Australia will have the opportunity to influence events in our own region.

Finally, we are also excited about the Ministerial meeting in January of the new Asia Pacific Partnership on Clean Development.

This is a unique collaboration by six key countries - the US, Japan, China, India, South Korea and Australia.

These countries account for around half of global GDP, half of the world's population and half of the world's energy use and greenhouse emissions.

For the fist time, it brings together developed and developing countries to find practical solutions to the greenhouse problem.

And Australia is there at the centre of the issue, hosting this critical high level meeting.

We have invited Foreign Ministers, Energy Ministers and Environment Ministers, and US Secretary of State Condoleezza Rice has already confirmed that she will attend.

So, we now have a regional architecture that has matured greatly over the last few years.

It is still maturing, of course…

… and it is too early to know exactly how this new architecture will evolve.

The East Asia Summit is only in its very first iteration and will take some time to bed down.

But we can say now that we have a regional architecture that serves Australia's interests well.

It is open and inclusive.

It addresses security and economic issues in a practical way.

And Australia has a very strong voice in how it develops.

Conclusion

To conclude then, Australia is a significant country, with global interests and not just a regional player.

Our interests do not stop at the borders of the Asia-Pacific region.

And nor do our strong relations with the US detract from our position in the region. Quite the opposite.

Australia is significant in this region and we come to the region with our own characteristics and values.

These values include a high regard for democracy - we're the 6 th oldest continuously operating democracy in the world.

Over time, the region is and will continue to more towards these values…

… where democracy is concerned, Asian values are western values, because democracy is universally attractive.

But a successful East Asian region will be an open region.

It won't demand conformity and it will respect diversity.

So, I'm proud of what the Government has been able to achieve over the last decade and in the last few years.